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American, US airlines profitable for first time in six years
American Airlines, the US’s largest, reported a slim profit and other US carriers are poised to follow suit for the first time in six years.
The Fort Worth-based American Airlines started the profit parade with reports from its parent company, AMR Corp, that it earned $15 million in the last quarter. That compares to a loss of $153 million a year earlier.
American was the first major US airline to report third-quarter results this year.
“Analysts expect the industry to post back-to-back profitable quarters for the first time since 2000,” said the Associated Press.
Continental and Southwest are expected to report profitable quarters later this week.
Airline analysts are predicting that a major reason for increased profits in the business can be traced to falling fuel prices.
And the news looks good for next year, analysts reported.
The current level of fuel prices “all but ensure meaningful industry earnings growth in 2007, except under the most draconian demand scenario,” Jamie Baker with J.P. Morgan Securities told The Dallas Morning News.
One airline analyst, Ray Neidl, predicted record airline profits next year of more than $6 billion.
Higher ticket prices have helped some US airlines move towards profitability.
Those same higher prices, packed planes and merger benefits should help US Airways report continued profits as well, according to media reports.
Earlier this year, US Airways posted a $13 million profit in its first quarter since emerging from bankruptcy.
“We have made great strides in executing the key elements of our restructuring plan related to increasing revenue, reducing costs and improving liquidity, all against the backdrop of a challenging industry environment,” said President David Siegel.
Report by David Wilkening
David
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